Single Member LLC Operating Agreement?

J

jsmooth

I'm in the process of forming a single member LLC to buy an exchange seat and trade through the LLC to segregate my personal funds.

My state does not require an operating agreement for single member llcs, yet I've still been advised to create one (people are telling me I should create one, but not telling me what should be in it...just the usual "contact an attorney" bs). Does anyone who has experience setting something like this up have some specific information as to what I should draft into this agreement with regard to a trading business? Is this more or less used like beneficiary information as to who would take over the business should I die? Any information is much appreciated. Thanks
 
What exchange are you joining? You only need an agreement if your bank, broker or regulator requires one.

1245
 
Quote from jsmooth:

I'm in the process of forming a single member LLC to buy an exchange seat and trade through the LLC to segregate my personal funds.

My state does not require an operating agreement for single member llcs, yet I've still been advised to create one (people are telling me I should create one, but not telling me what should be in it...just the usual "contact an attorney" bs). Does anyone who has experience setting something like this up have some specific information as to what I should draft into this agreement with regard to a trading business? Is this more or less used like beneficiary information as to who would take over the business should I die? Any information is much appreciated. Thanks
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You don't have to specify anything for the LLC. You can just describe the purpose of the LLC as "any lawful business recognized by the State of XXX".

I suggest contacting Robert Green on ET - he's a CPA specializing in trading. He'll be able to tell you the legal and tax ramifications of your situation better than any of us...
 
I've spoken to Colin Cody, after someone I met on this forum recommended him, he is more suitable for anything dealing with LLC's and trading through them... I would recommend them over Green's... whom I have also spoken with before...

http://traderstatus.com/

and your operating agreement should clearly state everything that you plan to do... dont leave it to chance of any kind... regardless of how silly it might seem...
 
blah has it correct...

Do a consult with Green. Owning or leasing an exchange seat has tax implications.
And certain tax elections may need to be internalized within your OA. By default, in the eyes of IRS a SMLCC is considered a "disregarded entity" (sole proprietorship/schedule C) unless you elect to be treated as a C or S corp as far the the IRS is concerned. Owning or leasing a seat forces that issue for a SMLCC trading business.

Also FWIW, when you set up your LLC you will/should be provided with generic OA.
 
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